How the Growth of AI Industry is Transforming the Conventional Legal Practice

By: Shubh Joshi, First year student of 5-year B.A.LLB at SLS, Pune

Introduction

What if, as lawyers or law students, we could complete days of research in just minutes and draft complex contracts in seconds? With the advent of artificial intelligence, there has been a disturbance in the job market filled with the hue and cry about people losing their jobs to AI, but if we learn how to use it, the same AI can make us a much more valuable and employable asset.

According to a report by Goldman Sachs, 44% of all legal tasks can be automated simply by using AI. This will significantly cut down the time we spend on research and document drafting. Imagine how this can transform your daily workflow and productivity.

Changing Legal Practice

In contract management, AI tools are incredibly efficient, scanning contracts in seconds to identify key clauses, potential risks, and obligations, streamlining the entire review process. For example, JP Morgan’s "COIN" platform is a prime illustration of this efficiency. This platform reviews commercial loan agreements in seconds, a task that once took three hundred and sixty thousand hours of manual work annually.

Similarly, in due diligence, particularly during mergers and acquisitions, AI systems excel at analyzing large volumes of data from target companies to assess compliance, financial risks, and liabilities. Deloitte, for instance, uses AI-based tools to cut due diligence review times by 50%, enhancing both speed and accuracy in transactions. These examples show how AI-powered automation is redefining legal workflows, making them faster and is growing to become more reliable for certain tasks. A study was conducted by medical professionals of Vanderbilt University to test the reliability of AI tools in solving medical queries with the subject being AI tools like Chat GPT. After the study, they found out that although the AI tools provided almost accurate and detailed answers in case of easier questions but, the accuracy deteriorated as they increased the difficulty of questions. This indicates that AI in general is not very reliable in carrying out complex tasks in medicine and other intricate fields like law.

Even though big companies like Deloitte and JP Morgan have stated using AI in their law offices for jobs like scanning contract and doing due diligence, doubt remains in the output of AI without the guidance of human experts. Therefore, although the degree of reliability has increased in recent years and will keep on increasing in the future but, it is safer to use AI for clerical tasks and utilise it as a mere assistant in advanced and high-importance tasks instead of completely relying upon it. One more reason to not increase reliance upon AI for complicated and high value tasks is lack of transparency which will be later dealt with in the blog.

AI and Legal Research

With the coming of AI research tools like ROSS Intelligence, which builds AI-driven products to augment lawyer’s cognitive abilities claims that it has boosted the research efficiency of law firms by thirty percent, the method of conducting research is slowly changing. Instead of spending multiple hours searching through different databases using Boolean Searches to find the accurate case laws, these AI tools can enable you to find what you need by just entering the correct prompt in plain English.

Researching with the help of AI is like a conversation interaction, which can even help you forecast a legal argument's success ratio by analyzing past judgments on similar matters. AI is alert on the recent developments in the field you are researching about and can provide you with the latest judgments and statutory developments.

A study by McKinsey found that 23% of a lawyer's job can already be automated with today's technology. All these developments can lead to more accurate and faster research.

Contract Review and Drafting

Contract drafting is something that the practitioners run away from as it is time-consuming and often repetitive. With the help of AI, lawyers can quickly generate the first drafts, leaving them more time for high-value work. AI also reduces human error and can form a contract with consistent language and formatting. The task of contract drafting and reviewing can become a lot faster with the help of AI; it is like going from a jog to a sprint.

These developments are not from a distant future, but several law firms are presently utilizing these AI tools. For example- Kira Systems is an AI tool that reviews contracts and helps the legal teams in quickly reviewing and analysing the key clauses, risks, and inconsistencies in the contracts. It ensures compliance with legal standards and speeds up the process of due diligence in merger and acquisition cases. 

Also, another AI tool named LawGeex uses predefined templates to review and draft contracts automatically. It flags potential issues or deviations. It helps the lawyers to ensure accuracy and consistency in contract language.

However, we should keep in mind that drafting a contract is an artisanal skill through which the drafter creates a document that represents the collective experience of the people involved in the case around which the contract is formed. The growing industrial demand has to be met, but using AI might cause us to lose the artisanal skill of contract drafting, which requires creativity and emotional intelligence that no AI has been able to generate to date.    

Indian judiciary’s stance on AI transforming legal practice

On 23rd May 2023, the Honourable Supreme Court invited bids for designing and implementing AI-based tools to transcribe court proceedings and arguments. It is an initiative aimed at enhancing accuracy and reduce reliance on manual transcription. This initiative will further increase the transparency in the judicial procedures of the SC. Important developments, such as this shows the Indian Judiciary’s positive outlook towards AI.

In the case of Jaswinder Singh v. State of Punjab and another, the HC rejected the bail petition of the accused on allegations of a brutal, fatal assault from the prosecution. The presiding judge was seen getting inputs from ChatGPT, an AI tool to obtain a wider perspective on the rules regarding granting of bail when cruelty is involved. However, it is to be noted that the reference to ChatGPT was neither expressed as an opinion on the case nor in the merits of the judgment. This reference was made with the sole intention of providing a broader understanding of bail jurisprudence when cruelty is a factor.

On the other hand, some of the Supreme Court judges like Justice Arvind Kumar have said that Artificial Intelligence can never replace Human Intelligence, and the ex-CJI Justice D.Y. Chandrachud, at a speech in IIT Madras opined that AI can be used as a tool to threaten and bully, perpetuate discrimination.

The Indian judiciary has, in some instances, been very welcoming of the developments in the AI industry but has also, on the other hand, have been critical of the repercussions of dependency on AI and its potential misuse. 

Regulatory Requirements

Co-founder of Open AI, Elon Musk, believes that the developments in the AI industry need a pause and that the sector needs regulations. The fast and unprecedented growth of the AI industry needs to be brought under the ambit of law, but the Indian government has not brought any such regulatory laws specific to artificial intelligence.

Some countries like Israel, the EU, China, and Brazil have developed AI-specific regulatory frameworks to monitor the growth and potential misuse of AI. India is facing problems with AI regarding intellectual property, cyber security, and ethics in general. The present statutes have not been adequate in dealing with these issues, which is why India, too, requires some legislation specific to AI to prevent its misuse. 

Challenges

While the benefits of AI in legal research and documentation are clear, its use also has challenges. For example, over-reliance on AI could become a concern in the future. It is essential to maintain our critical thinking skills and not solely rely on AI outputs, as the human element to law is irreplaceable.

Using AI in law also raises questions about accountability and transparency, EU appointed High Level Expert Group (AI HLEG) through its report found that while some AI rules already exist, key issues like transparency, traceability and human oversight are not yet covered under any laws in most industries. To help with this global institutes like IEEE and ISO are working on creating global standards for AI transparency and accountability; additionally, it requires an investment to be made in the training of employees or students to enable them to use these AI tools effectively.

The Delhi High Court ruled in Christian Louboutin Sas v. Shoe Boutique-Shutiq, 2023, that there is still uncertainty around the accuracy and dependability of data created by artificial intelligence. The Court is certain that, given the current state of technology, artificial intelligence (AI) cannot replace human intelligence or the human element in the adjudication process. The instrument might be used for nothing more than exploratory study or basic knowledge at most.

Conclusion

AI isn't just changing the way legal research and documentation is done; it's truly transforming the entire process. By automating tasks that used to take hours, improving accuracy, and offering more profound insights, AI is helping legal professionals work more efficiently and effectively. As AI continues to become a more significant part of the legal world, it's clear the future of law will be more accessible, data-driven, and streamlined.

It is essential to remember that AI is here to enhance our skills and not replace them. In the end, legal professionals are responsible for their work and must ensure that their client's interests are best served. While AI can be a great assistant in improving efficiency, it cannot substitute the expertise and experience of a lawyer.